Minister: Diamonds Have Done Good for Botswana

November 1, 2006byHedda Schupak

Botswana is currently the No.1 producer of diamonds in the world by value. Leonard Makwinja, deputy managing director of Debswana, the mining company jointly owned by De Beers and the Botswanan government, recently talked with JCK editor-in-chief Hedda T. Schupak about future plans and the good that diamonds wrought for his country.

JCK: What do you see as the biggest threat to diamond sales?

Leonard Makwinja: Synthetic diamonds, when they become available at a cheaper price. Hopefully people will still want natural diamonds—and that we’ll be able to brand diamonds as natural in the future—but synthetics do pose a threat.

JCK: What do you see as the biggest opportunity for growth in diamond sales?

LM: We’re already seeing tremendous growth in Asia, especially in Japan and China. The DTC has done heavy marketing there, and it’s showing the fruits of those markets. The younger generation [there] believes more in diamonds. And, the end of conflict is good news, and peace in Angola and the Democratic Republic of Congo.

JCK: Are you worried about the Leonardo DiCaprio movie The Blood Diamond?

LM: Conflict taints the image of all diamonds, but the Kimberley Process has done a lot—99.8 per- cent of diamonds are certified to be conflict free. The real story is what diamonds have done for Africa. There’s so much we can tell. I’ve seen it. I was born before Botswana’s independence, and I’ve seen what diamonds can do.

JCK: What about other countries?

LM: If I look at Angola and DRC, the governments there can see how diamond money can be used for development. It’s just beginning, but the prospects are good and there’s a lot there that’s going to come up.

JCK: How long has there been peace there?

LM: Roughly since 2000. Of course, wars don’t stop overnight, they taper off with occasional outbursts of fighting, but basically the wars have been over since 2000. When [former DRC President Laurent-Désiré] Kabila was killed and his son [Joseph Kabila Kabange] took over [as president of the DRC], the wars tapered off. Elections are now coming up, and by the end of the year we’ll have a new government in the DRC. I hope the progress continues.

JCK: Hopefully they’ll see Botswana as a model.

LM: Botswana depends so much on people of the first world to believe that diamonds are used for good, for development. So much good has come to Botswana because of diamonds.

JCK: Does Debswana have any plans to open cutting factories in Botswana?

LM: No, Debswana is purely a mining company. Cutting factories would be opened by people in the cutting business.

JCK: Since Debswana is jointly owned by De Beers and the government of Botswana, do you foresee any plans to fully integrate mine-to-market and sell through the De Beers stores?

LM: No, no plans for vertical integration. All Debswana production is aggregated through the Diamond Trading Company.

JCK: What’s Debswana’s biggest competitor?

LM: Russia. There’s still so much unknown about it.

JCK: What about Canada?

LM: Canada is up and coming, but there are very tough mining conditions there. There’s also growth coming from Angola and the DRC, and very good prospects there for opening new mines.

JCK: Is De Beers planning to open mines there?

LM: De Beers is one company prospecting. Many others are too.

JCK: Are there other companies mining in Botswana?

LM: Not in a big way. The Australian company BHP has some small mining, but it’s very insignificant [in terms of total diamond exports].